New Jersey Bankruptcy Laws

New Jersey Bankruptcy Exemption Laws

The bankruptcy process in New Jersey is governed by federal law and the New Jersey Annotated Statutes. New Jersey bankruptcy laws play a crucial role in deciding which assets you can keep in your bankruptcy case.

Bankruptcy types in NJ

People in debt might use bankruptcy to get a fresh start and discharge the dischargeable debt. You can file Chapter 7, Chapter 13, and Chapter 11 bankruptcy under the Bankruptcy Code in NJ.

New Jersey Bankruptcy Exemption Laws

These exemptions keep the trustee from seizing your property, selling it, and dividing the proceeds to your creditors. Married couples filing joint bankruptcies can often double the federal exemption levels.

Exemptions from Federal Law

Debtors in New Jersey can choose between federal and state exemptions under the Bankruptcy Code in NJ.

1. Homestead exemption

Under federal law, up to $25,150 in home equity is protected. You probably have low equity if you have paid less than half of your debt, and mortgage loans are repaid over time (interest first).

2. Exemption for Motor vehicle and personal assets

The same rules govern the $4,000 motor vehicle equity exemption. You have less equity in the vehicle unless you've paid off more than half of the loan. The equity restriction is rarely an issue because used cars have low financial values. This regulation also applies to furniture, electronics, jewelry, tools of the trade, and domestic goods. There is a distinction between cash value and fair market value.

3. Exemption for personal benefits

Up to $13,400 in insurance premiums and policy equity is exempt, and personal injury settlements up to $26,000 are exempt. Receipts for spousal and child support are excluded as long as they are substantially necessary for approval.

4. Exemption for other personal benefits

These same safeguards apply to VA disability, unemployment compensation, Social Security, and other government payments. 401(k)s, pension plans, and retirement savings are exempted by $1.3 million.

5. Wildcard exemption

The federal exemptions also apply to $1,325 in cash in a bank account, yachts, and other nonexempt property. You can also apply up to $12,575 of your unused homestead exemption toward the wildcard exemption.

Exemptions by State

Other (State) exemptions are not as extensive as federal exemptions, and retirement plans are the most notable exception. Under federal law, IRAs and additional private funds may still be exempt.

  1. Exemption for personal property
  2. $1,000 exemption in personal property
  3. Pension schemes for the general public, such as teacher retirement plans.
  4. Social Security, workers' compensation, and unemployment payments.
  5. Exemption for wildcards ($1,000)


Filing for bankruptcy in NJ is a big decision, and you should make it only after you've gotten expert advice and a good grasp of your options and opportunities. While we are ready to assist you if you have already determined that filing bankruptcy is the best option, we are also here to ensure that you choose the best option.

New Jersey Bankruptcy District Courts


Martin Luther King, Jr. Federal Building
50 Walnut Street
Newark, NJ 07102
Phone (973) 645-4764


Clarkson S. Fisher US Courthouse
402 East State Street
Trenton, NJ 08608
Phone (609) 858-9333


U.S. Post Office and Courthouse
401 Market Street
Camden, NJ 08101
Phone (856) 361-2300


Hon. Michael B. Kaplan, Chief Judge

US Bankruptcy Judge for the District of NJ
402 East State Street
Trenton, N.J. 08608
Courtroom #8
Chambers e-mail:
Chambers phone number: (609) 858-9360

Hon. Rosemary Gambardella

US Bankruptcy Judge for the District of NJ
50 Walnut Street, 3rd Floor
Newark, N.J. 07102
Courtroom 3E
Chambers e-mail:

Hon. Christine M. Gravelle

US Bankruptcy Judge for the District of NJ
402 East State Street
Trenton, N.J. 08608
Courtroom #3
Chambers e-mail:

Hon. John K. Sherwood

US Bankruptcy Judge for the District of NJ
50 Walnut Street, 3rd Floor
Newark, N.J. 07102
Courtroom 3D
Chambers e-mail:


Sean Quigley

Deputy-in-Charge, NJ
Phone no: 856-361-2348

Nancy Figueroa

Deputy-in-Charge, NJ
Phone no: (609) 858-9380

Updated on:

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